“The S201 will be powered by state-of-the-art petrol and diesel engines developed in-house, which will give us best-in-class performance,” said Rajan Wadhera, EVP, R&D and Global Product Development of M&M on the sidelines of the Frankfurt Motor Show. “I am pretty excited with the 1.2 petrol which will come with turbocharging and direct injection,” he added.

The S201’s motor belongs to Mahindra’s all-new mFalcon engine family. The first derivative of the mFalcon made its debut in naturally aspirated form as the G80 1.2-litre, three-cylinder unit under the hood of the Mahindra KUV100, making a modest 80.6hp.

The new compact SUV's 1.2 motor is essentially the same three-cylinder unit with the same bore and stroke but it gets direct fuel-injection and a fairly large turbocharger which will result in a massive leap in power to around 140hp. Compared to the competition, the S201’s motor is a good 30hp more than the Tata Nexon's and around 20hp more than the new Ford 1.5-litre ‘Dragon’ which will make its global debut in India later this year.

Mahindra is also developing a turbocharged version of this engine without direct injection that'll power some of its other future models. However, it's not clear if the indirect or port-injection version of this engine will be offered in a lower variant of the S201.

The S201 will also be powered by a 1.5-litre, four-cylinder diesel, which is essentially the 1.2, three-cylinder diesel motor that was also first introduced in the KUV100, but with an extra cylinder. However, this all-new four-cylinder will first be seen in the Innova-rivalling MPV (Code: U321) that is due for launch this financial year. The U321 is expected with a 1.6-litre diesel, but for the S201, Mahindra has downsized the engine to under 1.5 litres to meet the ‘compact car’ criteria. Power figures haven't been disclosed yet but sources reveal that the 1.5 diesel could develop as much as 125hp, which again gives the S201 a power output that is way ahead of its rivals. The Maruti Vitara Brezza in comparison develops a puny 90hp.

The S201 is essentially a modified version of the Ssangyong Tivoli which has been shortened to a length of less than 4 metres. The underpinnings and most of the interior bits are carried over from the Tivoli, but the design, especially the front grille, has been tweaked to give it the look of a Mahindra and not a Ssangyong.

Benefitting from the tax concessions given to cars under four metres in length, the S201 is expected to be aggressively priced and we expect it to go head to head with the Tata Nexon.